World Trade Organization
The World Trade Organization (WTO) is an international organization established on January 1, 1995, aiming to facilitate global trade by promoting the free movement of goods and services among its member states. Emerging from the General Agreement on Tariffs and Trade (GATT), which had been in place since 1947, the WTO seeks to hold its members accountable for reducing tariffs and enhancing trade practices more effectively than previous treaties allowed. Headquartered in Geneva, Switzerland, the organization has played a significant role in liberalizing trade, resulting in substantial economic growth for many countries, particularly for larger economies like the United States.
While the WTO has fostered increased consumer choices and lower prices in various markets, critics argue that the benefits of free trade have not been equally distributed among all member nations. Smaller countries, in particular, may not have experienced the same economic advantages, leading to perceptions that the organization favors larger trade powers at their expense. The WTO's efforts to include service sectors in its agenda reflect its broader commitment to modernizing trade rules, yet the ongoing debates about equity in trade outcomes illustrate the complexities involved in global economic cooperation.
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World Trade Organization
Identification International organization designed to monitor, negotiate, and facilitate worldwide trade
Date Founded on January 1, 1995
The World Trade Organization’s purpose is to improve the economic standing of its members. The United States and other member states have seen increased global trade, greater access to cheaper goods, and better international relations with one another. However, the WTO is somewhat controversial, because many nations see the organization as catering to the interests of large countries, such as the United States, while ignoring others.
After World War II, many questions arose about what sorts of global institutions could be created to facilitate better economic and political cooperation in the international community. The founding of the United Nations created some assurance that political disputes could be settled through peaceful means, instead of through war. The General Agreement on Tariffs and Trade (GATT) was established in 1947 to remove trade barriers, lower tariffs, and create the free movement of goods between nations that signed the treaty, including the United States. The agreement was relatively successful in accomplishing some of its aims, but it was limited in its abilities, because members sometimes chose not to follow its mandates.
![The headquarters of the World Trade Organization in Geneva, Switzerland. By E. Murray (Own work) [GFDL (http://www.gnu.org/copyleft/fdl.html) or CC BY-SA 3.0 (http://creativecommons.org/licenses/by-sa/3.0)], via Wikimedia Commons. 89141649-101468.jpg](https://imageserver.ebscohost.com/img/embimages/ers/sp/embedded/89141649-101468.jpg?ephost1=dGJyMNHX8kSepq84xNvgOLCmsE2epq5Srqa4SK6WxWXS)
![Map of World Trade Organization members and observers. Green: members; blue: members, duly represented by the European Union; yellow: observers; red: nonmembers. By BlankMap-World6.svg: Happenstance et al. derivative work: Danlaycock (This file was derived from: BlankMap-World6.svg:) [Public domain], via Wikimedia Commons. 89141649-101467.jpg](https://imageserver.ebscohost.com/img/embimages/ers/sp/embedded/89141649-101467.jpg?ephost1=dGJyMNHX8kSepq84xNvgOLCmsE2epq5Srqa4SK6WxWXS)
The GATT remained a force in the global economy up until 1995, when trade negotiations resulted in the creation of the World Trade Organization (WTO). The WTO had the same purpose as the GATT, to create the free movement of goods between its member states, but it sought to hold its members more accountable to lower their tariffs than could a treaty alone. The WTO also included in its aims the improvement of national service sectors rather than just industries. The United States and the other members of GATT were the first members of the WTO when it was created on January 1, 1995.
As an international body, the WTO has been extremely successful in liberalizing trade among its member states. Those states have enjoyed great economic benefits resulting from the removal of tariffs. The ability to trade freely with other nations has led to huge economic growth for the United States, and the country has experienced an increase in the amount of choices in goods that its consumers may purchase, as well as a reduction in prices for items such as food and clothing. By all accounts, the WTO has made positive developments in global trade. However, some critics would say that not all countries have experienced the economic growth or have benefited from liberalized trade to the extent that the United States has. Some smaller member countries have yet to see the economic benefits associated with free trade. The WTO has therefore been criticized as being one-sided, benefiting trade giants such as the United States at the expense of smaller nations.
Further Reading
Matsushita, Mitsuo, Petros Mavroidis, and Thomas Schoenbaum. The World Trade Organization: Law, Practice, and Policy. New York: Oxford University Press, 2006.
Narlikar, Amrita. The World Trade Organization: A Very Short Introduction. New York: Oxford University Press, 2005.